Libra is a suggested permissioned Blockchain virtual currency, which has proposed by Facebook, is a new term in the marketing industry. It is formally announced in present June and its first version will be getting released next year, probably. It has been declared by Facebook that each of its partners will instill an introductory amount of US$10 million making it full asset backing on the opening day. The world’s biggest social media company has declared that it will be a stablecoin, which means a digital currency that doesn’t fluctuate much due to the support of government-backed currencies and securities.
It might be the chances that Libra would become a great anti-competitive trust case in history and would competition to previous firms. Libra has main focus on its revolts as cryptocurrency or payment processing system. What are they? Centralized governance, weak privacy security, low output, impotence to handle numerous currencies. The objectives of Libra need to be modified to resolve combats, attract users, amuse the investors and deal with abrupt issues. Libra is praised as a cryptocurrency, so it is natural to use the previous one as a model of its structure. The existing peer-to-peer payment networks like PayPal are layered on the top of conventional financial system to ease some type of transaction. These networks costs high fees and Libra will be layered on the top of the existing financial system; each of the coin will be backed by traditional money in the back. Unlike the previous one, there is possibility to create payments merger on a global scale at a cheap price.
Bad for Privacy
Facebook is already a trustworthy platform in social media and manages most of the advertising market. In past years, Facebook has purchased the companies from which it suffers menace. For e.g. Instagram and Whatsapp and in other cases, when it becomes difficult to purchase, it embrace the features of the applications and integrated into its own. If we compare the stock performance of some of the apps with Facebook, Facebook has high records. Facebook do not charge for their consumer products and the data is far better and cheap than the previous ones. With this current Libra project of Facebook, Facebook want to increase its monopolistic power by pervading unparalleled information about consumer purchasing habits. With the richness of social media data, Facebook usually collects and data can be rectified to refine individual related information and choices. The culture of apps like Facebook is based on brand concerns and access to private data. The data on social media can be hacked anytime very easily.
Money has evolved to satisfy the need of users as people always prefer to use what is handy. Thus Government proposes new kind of money based on rational design rather than tradition but it fails. The concept of Bitcoin was unique and designed rationally as a new type of money which has no link with traditional value, no use of force and no legal permission. Still, it accomplished a quick level of global compliance and collected massive value. It stimulated a revolution in both traditional as well financial systems and a kind of new cryptocurrency. Bitcoin played a crucial part in success during financial crisis in the previous years and have enforced people to distrust government issued money and financial institutions.
Libra is something different concept and opposite of this. It is not evolved to meet the self-perceived needs of users; rather it is an idea in which experts have balanced the interest of governments, non-governmental organizations, investors and ordinary users. Libra has 28 backers out of which, very few are powerful. It is a rationally designed global currency administrated by group of disinterested technocrats. Though it has copied some features from cryptocurrencies but the opposite one. The competition of Libra is natural currencies not cryptocurrencies. In other words, it is a complement to cryptocurrencies. The block chain design and Move programming language of Libra allows for smooth interaction with cryptocurrencies and it succeeds in becoming the legal-tender medium of commerce exchange.
Some questions related to Libra are unclear. Whether a user will be able to hold their coins in a truly non-custodial wallet? Can someone keep access to the coins on the piece of paper or on a thumb drive? If yes, how will Libra stop someone from transferring that piece of paper to criminal or to someone having banking sanctions against it? It is unclear how Libra will prevent keys from being given to bad people. Many of the concepts are unknown for Libra which need to be answered.